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ACCA Applied Knowledge · Management Accounting · Sampling methods

A company has 5,000 sales invoices stored in 100 boxes of 50 invoices each. To save time, the accountant randomly selects 4 boxes and examines every invoice in them. Which statement about this method is correct?

It is cluster sampling. The boxes are natural groups, a few are chosen at random and all invoices within them are checked. This saves time and cost compared with simple random sampling, but the sample may be less representative if the boxes differ from each other.

  1. AIt is cluster sampling, and is cheaper than simple random sampling but may be less representative if boxes differ from each otherCorrect
  2. BIt is stratified sampling, and guarantees each box is represented in the sample
  3. CIt is systematic sampling, because the boxes are numbered in order
  4. DIt is quota sampling, because a fixed number of boxes is required

Explanation

The population is divided into natural groups (clusters), some clusters are randomly chosen and all items within them are examined. This reduces cost and effort, but if boxes differ systematically the sample may not represent the population. Stratified sampling would sample from every group.

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